How to Save Money on Life Insurance Costs

You hear a lot about life insurance. It is something that just about everyone needs. If you have a spouse and children who depend on you, life insurance is important. Life insurance is there to help provide financial support for your dependents in the event of your unexpected death. Without it, your family could be left struggling. One of the biggest factors that keep people from buying life insurance, however, is the cost. Here are a few ways to save money on life insurance costs, making it more affordable for you to protect the ones you love.

Buy in as Soon as the Need Arises

The earlier you buy life insurance the better. The cost of premiums goes up as you get older. Additionally, the number of insurers willing to work with you as you age often becomes smaller. If you need life insurance, the sooner you buy, the better. There are many term policies that give you the option to renew at the end of your policy without the need for another medical exam. You may also be able to lock in your premiums for a set time period.

Choose Term Life Insurance

There are two options for life insurance, term life and whole life. Term life policies are those that are in effect for a set number of years, such as 20 or 30 years, while whole life policies are in effect for your entire life. While whole life policies can build cash value over time, the annual premiums tend to be significantly higher. For most people, a term life insurance policy provides you with all the coverage you need and for a much more affordable rate.

Buy Only What You Need

Premiums for life insurance are based on a number of different factors. The more coverage you buy, the more you are going to pay every year. The problem is that most calculators overestimate what you actually need, leading you to think that you are going to be paying more than you really should be. You need to figure out how much your family would need to maintain their lifestyle in the event of your death. It is also important to reexamine your policy annually or when you have a major life change, such as a new baby.

Shop Around

Shopping for life insurance can be overwhelming. It can be tempting to sign for the first option that seems reasonable to you. Different insurance companies can offer significantly different rates. It can be well worth your time to shop around. There are even websites out there that can pull rates from several different companies so you don’t have to request individual quotes from each one.

Improve Your Health

When buying life insurance, your health plays a crucial role in your premiums. Smoking, high blood pressure, being overweight, and more can all cause your premiums to skyrocket. Insurance companies request a medical exam. Taking this exam is important. Opting for a non-medical exam can cost you big. Improving your health by quitting smoking, losing weight, and just generally taking better care of yourself can help tremendously. Even if you purchase life insurance when your health is not as good as it could be, you can request a reevaluation after improving your health to lower your current rate.

Pay Annually

If you can swing it, pay annually. Insurers often tack on additional fees if you pay monthly. Many companies will actually discount your rate by as much as 8% if you pay annually, which can add up over time. Plus, you don’t have to worry about making an extra payment every month.

Consider Final Expense Insurance

If you are older, your kids are grown, and you are getting ready to retire (or you have already retired), a life insurance policy might not make much sense. Not only do you not have children to support anymore, but you also might not have a mortgage any more or other significant expenses. In these instances, final expense insurance could save you a significant amount of money. Final expense insurance is specifically designed to cover the costs that are associated with your death. In addition to covering the cost of your funeral and burial, this type of insurance can be used to help cover the cost of any debts that you might leave behind. This type of insurance plan will help to protect your family, preventing them from taking on a huge financial burden while they are also grieving your loss.

While we like to think that nothing bad will ever happen to us, accidents do occur. When you have people who depend on you financially, having life insurance can provide great peace of mind that those you love most will be protected in an otherwise emotional and stressful time.